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How Free Trade Agreements Impact Your Company
Bilateral, multilateral and regional Free Trade Agreements (FTAs) are being negotiated by the U.S., the EU and many other countries as a method of encouraging trade.
FTAs offer qualifying goods reduced duty or duty-free treatment, and may offer market access by, for example, permitting producers in an FTA Member Country to bid on government procurement contracts otherwise primarily restricted to domestic parties.
In order to obtain preferential treatment under an FTA, a good must qualify as an “originating good.” This is not the same as meeting the country of origin rules, but is determined under a unique and more stringent set of FTA rules. Which rule applies is based on the tariff classification of each product, and there are hundreds or rules, although it is sometimes possible to come up with a general rule for a product category. The particular rule applicable to your products may be based on whether manufacturing performed in a Member Country causes a specified shift in tariff classification or adds a minimum amount of value, based on complex value calculation rules. Suppliers must be able to provide evidence that they are performing these calculations correctly.
Our Services
We can assist your company to gain a competitive advantage through any FTA and/or preferential duty programs to which the countries in which you do business are a party, such as the North American Free Trade Agreement (“NAFTA”), and the U.S. Generalized System of Preferences (“GSP”). These agreements and programs have lowered or eliminated duty rates for certain products that are traded between the United States and eligible countries. We assist importers and exporters in determining whether the products that they trade qualify under complex “origin” rules. If the products meet the requirements, we will assist in securing future and retroactive duty savings. In addition to product eligibility analyses, we offer refund programs, compliance audits and training seminars.
We can confirm our position on FTA eligibility with the customs authorities through binding rulings and can fix any errors discovered and minimize or eliminate penalties through prior disclosures.
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